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Call of Duty: Reforming the MUP Pension System


This policy brief analyzes the unsustainability of the Military and Uniformed Personnel (MUP) pension system in the Philippines and proposes policy options for reform. The current non-contributory system, fully subsidized by taxpayers, is facing escalating costs due to the increasing number of MUP, automatic indexation of pensions to active MUP salaries, and a low optional retirement age. The brief highlights the historical failure of the separate military pension scheme, the Armed Forces of the Philippines-Retirement and Separation Benefits System (AFP-RSBS). It compares the generous MUP pension package with the less favorable schemes for private-sector workers under Social Security System (SSS) and Government Service Insurance system (GSIS). The brief introduces several policy options, including establishing an independent commission to review the system, creating a separate pension scheme for the military, raising the retirement age, requiring MUP contributions, shifting to a defined-contribution or blended system, and considering privatization. These reforms aim to create a fiscally sustainable and equitable system that recognizes the contributions of MUP while ensuring long-term economic security for retirees.


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